LUCELEC is cautioning consumers in Saint Lucia to prepare for higher electricity bills, as escalating global oil prices begin to impact local fuel surcharges.
The warning comes against the backdrop of rising geopolitical tensions, particularly in the Middle East, which have driven up the cost of crude oil on the international market.
Managing Director Gilroy Pultie explained that while the company employs a fuel hedging strategy to stabilize prices, it cannot fully shield consumers from sudden increases.
“Through our fuel hedging programme, LUCELEC can lock in the price of a portion of the fuel purchased, which helps to reduce exposure to sudden market movements,” he said. “However, the balance of the fuel must be purchased at prevailing international prices.”
He noted that the recent spike in oil prices is already translating into higher costs for consumers.
“When global oil prices rise sharply, as we are now seeing, it affects the fuel surcharge and what customers pay on a month-to-month basis, given the ongoing global conflicts,” Pultie stated.
According to Pulitie, conditions prior to the current geopolitical tensions did not favor more aggressive hedging.
“Unfortunately, the market conditions prior to the conflict in the Middle East did not meet our criteria for significant hedging, and as such, it is only cushioning the sharp rises to a very limited extent,” he added.
Despite the challenges, the company says it remains focused on managing the impact on customers as effectively as possible.
“Electricity is an essential service, and we understand the pressure that higher prices can place on customers,” Pultie said. “While global fuel prices remain outside of our control, we are committed to operating efficiently, communicating transparently and engaging customers throughout this period.”
He added that LUCELEC is actively reviewing its approach to fuel procurement in response to the current volatility.
“We are reviewing our hedging strategy and are constantly looking for opportunities to hedge more of the fuel used going forward, despite the challenges presented at this time,” he said.
The company’s warning signals potential increases in monthly electricity bills in the coming weeks, as global energy market instability continues to ripple through small island economies.